Well it’s that time again when Doncaster finally appears on the financial calendar – albeit somewhat briefly. It is of course the St Leger meeting at Doncaster races, which is the second half of the old rhyme ‘Sell in May and go away, and don’t come back until St Leger day’.

So should we have obeyed the rhyme? Well the FTSE100 ended up 1.7%, but that hides a pretty erratic time with a low in July of about 4,800 - quite a way below where it stands at the time of my writing (5500). However, contrast this with the FTSE Gilt index which rose by some 5.7% which has been quite remarkable change when you consider the comments earlier in the year of the potential toxic nature of UK debt – Pimco’s comment about nitro-glycerine comes to mind.

That old friend Gold went up by 2.6% pleasing those who love to stroke their financial teddy bear – that is until they translate that back in Sterling – in which case it fell by 2.8%. A good decision was probably not to get too excited about the US as the S&P Index fell by 3.7%, which of course was then made worse by the currency moves resulting in the Sterling equivalent of a fall of 9%. Still, good news from the MSCI Emerging markets which continued to power ahead by 4.7% - that is until you again turn it into pounds in which case it too turned into a loss of 0.8%.

The headline rise though must have been the soft commodities and especially wheat, which was up 43% in Dollar terms, reducing to a still perky 36% in Sterling. This just serves to underline the impact that currency moves can have and what can look like a

healthy profit ‘over there’ – can evaporate into a loss with a single currency switch. All the more reason to ensure that you have an effective currency hedging structure in place.

However, the rhyme is pretty useless. It merely serves to highlight short term movements which are often exacerbated by lower volumes being disproportionately buffeted by summer scare headlines. Five months is not a valid investing period – it is, as the St Leger is – merely an opportunity for a bet.

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With the return of the Mr Nadir the other week, I was asked if such a corporate fiasco is likely to happen again. Surly my enquirer went on, we must have learnt from our mistakes. The answer is yes I am sure some have learnt from it, but sadly such fiascos are an inevitability of corporate life.

Whether through theft, incompetence or just downright skulduggery, there will always be

corporate miscreants around, no matter how tight the reporting and compliance. So how can we spot the next Polly Peck? Well probably the common themes will be that of opaque ownership structures and unfathomable financial accounting. Surely can such cases still exist today? I would suggest that certain overseas companies despite having UK listings may well have the ability to lull us into false sense of security especially when those companies may have evolved from areas not so well known for their corporate governance rules and shareholder rights – central Asian companies have come a long way over the past few years – some still have a long way further to go in this area!

For example, take the story of First Quantum, a UK listed company. They invested $700m in a mine in the Congo. This was confiscated by the government and has now been bought indirectly from the Congo government by Kazakmys and a FTSE 100 company run by three Russian oligarchs.

This has been widely reported as many London fund managers are up in arms about the original confiscation and then the purchase by another UK FTSE 100 company whose board is choc full of City grandees who should know better – Lord Renwick of Clifton (former UK Ambassador to the US and RSA), Fluor, Fleming Family &

Partners, Richemont, SAB Miller, BHP, BA, Liberty International, JP Morgan, GEM Diamonds), Peter Hickson, (Chemring, Anglian Water, Powergen, Scottish Power, RAC plc), Clinton Dines (BHP, Jardine Matheson), Philip Aiken (Robert Walters, National Grid, BHP, BTR and BOC), Simon Heale (Panmure Gordon, Morgan Crucible, PZ Cussons, Cathay Pacific)

Always comforting to know they are on the ball!

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New careers? At a time when the government is desperate to develop any job creation, it is encouraging to report that there is an area of our economy where the demand for graduates is booming. Last week I had the pleasure of awarding this year’s winner of the Seven Investment Management University Financial Planning Team Challenge Cup. This is an inter university challenge specifically aimed at student financial planners, and designed to show students that financial planning is a career in its own right. This new generation has in fact seen the benefit of actually coming into the right market at the right time – in stark contrast to the position for most graduates coming down from university at the moment.

It’s not just that there is a shortage of professional planners, especially younger ones, but there is a rising demand from confused, frustrated and even angry members of the public, often let down by much of the financial services industry and all its products. For most people they don’t want another product – they want some good clear reliable and trustworthy advice, and if this can be laid out in a simple and understandable plan across the family and generations - what a leap forward for most of us. Add to this the technology available to this next generation, then facilities frankly usually associated with the ‘uber’ wealthy family offices, can now be provided in most part to the great British middle class.

So last week the team from Manchester Metropolitan University won the cup again and I understand that the faculty has been inundated with employment enquiries from would be employers – music to the Prime Minister’s ears! I wish them well in their careers.

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And finally..............Carson City, Nevada - One Nevada gubernatorial hopeful thinks he has found a marvellous way of speedily fixing Nevada's budget crisis. Non-partisan candidate Eugene ‘Gino’ DiSimone believes people would pay for the privilege to drive up to 90 mph on designated highways - and fill the state's depleted coffers.

DiSimone calls his idea the ‘free limit plan’. He estimates the plan would bring in $1 billion a year. After setting up an account, anyone in a hurry could dial in, and for $25 charged to a credit card, be free to speed for 24 hours. Not unsurprisingly the Nevada Highway Patrol isn't keen on the idea, saying it would lead to increased injuries and traffic deaths.

Well it would never happen here as you can’t get above 30 mph on the M25.

Have a good week.

Justin A. Urquhart Stewart

Director

Seven Investment Management Limited